Here’s the Reason behind the U.S. Paying Billions to Russia’s Nuclear Agency

In a massive facility located in the Appalachian valley, resembling the size of the Pentagon, numerous empty holes cover the bare concrete floor. Among them, only 16 holes are occupied by tall centrifuges responsible for enriching uranium, which is a vital component for nuclear power plants. Currently, these centrifuges are inactive. However, if every hole housed a functioning centrifuge, this facility could end the United States’ predicament in relation to the war in Ukraine and its transition away from fossil fuels. American companies currently pay approximately $1 billion annually to Russia’s state-owned nuclear agency for the fuel that generates over half of the nation’s emissions-free energy.

This flow of money from the United States to Russia persists, despite efforts to sever economic ties with Moscow by US allies. Payments for enriched uranium are made to the subsidiaries of Rosatom, which has close ties to Russia’s military. As the United States looks to reduce reliance on fossil fuels and increase its dependence on nuclear power, it faces challenges because it lacks a domestic company that enriches uranium. The United States used to dominate the uranium market until historical events, including a deal between Russia and the United States to support Russia’s peaceful nuclear program after the collapse of the Soviet Union, allowed Russia to secure half of the global market share. Consequently, the United States halted its enrichment of uranium entirely.

Although the United States and Europe have stopped purchasing Russian fossil fuels as a response to the Ukraine invasion, it will take several years and substantial government funding to establish a new supply chain for enriched uranium. The situation at the facility in Piketon, Ohio, which remains largely empty after over a year into Russia’s war in Ukraine, demonstrates the difficulties involved. Currently, approximately one-third of the enriched uranium used in the United States is imported from Russia, the cheapest producer in the world. Most of the remaining supply is imported from Europe, while a smaller portion is produced by a consortium from the United Kingdom, the Netherlands, and Germany operating within the United States. Over eleven countries worldwide rely on Russia for more than half of their enriched uranium.

According to the company managing the Ohio plant, it could take more than a decade for them to produce quantities that compete with Rosatom. The Russian nuclear agency produces both low-enriched and weapons-grade fuel for civilian and military purposes. Their involvement in Ukraine also extends to commandeering the Zaporizhzhia nuclear power plant, Europe’s largest, leading to fears of radioactive leaks or a major meltdown in the event of a battle over the facility.

Senator Joe Manchin III, a Democrat from West Virginia who leads the Senate’s energy committee, stated, “We cannot be held hostage by nations that don’t share our values, but that’s what has happened.” Manchin sponsors a bill to rebuild American enrichment capacity, proposing federal subsidies for an industry that was privatized in the late 1990s.

The current reliance of the United States on Russian enriched uranium also makes its current and future nuclear plants vulnerable to a potential shutdown by Russia, a strategy that President Vladimir V. Putin may employ. Despite this vulnerability, the US government has shown little sense of urgency in kick-starting domestic enrichment. Billions of dollars in potential federal funding are caught up in bureaucratic processes.

James Krellenstein, the director of GHS Climate, a clean energy consulting firm, criticized the Biden administration for not having a plan to end this dependence on Russia even after over a year since the invasion of Ukraine. Krellenstein suggested that by completing the centrifuge plant in Ohio, the United States could reduce its dependence on Russian enrichment.

The American Centrifuge Plant in Ohio is crucial not only for enriching uranium but also for producing a more concentrated form of enriched uranium necessary for the development of smaller, safer, and more efficient next-generation nuclear reactors. Despite receiving billions of dollars in federal development funds, next-generation reactors in the United States are still in the design phase.

One American company, TerraPower, founded by Bill Gates, had to delay the opening of a new-age nuclear plant in the United States by at least two years due to their commitment to not use Russian enriched uranium. TerraPower’s facility will be established on the site of a coal-burning plant in remote Kemmerer, Wyoming, which will be decommissioned in 2025. TerraPower has promised jobs and retraining for the workers affected by the coal plant closure. However, the delays have caused doubts among some residents of Kemmerer.

The situation in Piketon and Kemmerer, two coal-country towns, is unexpectedly linked as they both hope for economic benefits from resolving the government’s uranium enrichment crisis. Jeff Navin, TerraPower’s director of external relations, stated, “Some of the biggest national security questions facing the country run through Piketon and Kemmerer.”

The United States’ reliance on foreign enriched uranium mirrors similar vulnerabilities in microchips and critical minerals needed for electric batteries, essential components in the global energy transition. However, in the case of uranium enrichment, the United States willingly gave up its advantage. In the 1950s, Piketon became one of the two major enrichment facilities in the Ohio River Valley, utilizing gaseous diffusion. On the other hand, the Soviet Union developed centrifuges as part of a secretive program, which proved to be significantly more energy-efficient than gaseous diffusion. By the end of the Cold War, the US and Russia had similar enrichment capacities, but Russia had a more cost-effective production process.

In 1993, the US and Russia signed an agreement known as Megatons to Megawatts, where the US purchased and imported a significant amount of Russia’s surplus weapons-grade uranium, which was then downgraded for use in power plants. While this agreement provided cheap fuel for the US and much-needed cash for Russia, it also rendered America’s inefficient enrichment facilities unprofitable, resulting in their closure. Rather than investing in upgraded centrifuges domestically, subsequent administrations continued buying from Russia.

The Piketon centrifuge plant, operated by Centrus Energy, is located on the site of the former gaseous diffusion facility. If fully developed, it could create thousands of jobs and produce the necessary types of enriched uranium for both current and next-generation nuclear plants. Without output from Piketon, companies like TerraPower would have to rely on foreign suppliers, such as France, which may be more politically acceptable and reliable than Russia but would also be more expensive.

TerraPower considers itself essential to the shift away from fossil fuels in electricity generation. Their nuclear reactor incorporates a sodium-based battery that allows the plant to increase electricity production as needed, thereby compensating for fluctuations in wind or solar power elsewhere. To achieve US emissions reduction pledges, the Department of Energy estimates that nuclear power capacity must more than double.

Without competition in the enrichment market and next-generation reactors, both TerraPower and Centrus Energy warn that the gap between the US and its rivals, particularly Russia and China, will continue to widen. These countries are winning long-term nuclear contracts with nations that the United States also seeks to establish relationships with.

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